FACTBOX: Japan's Middle East energy dependency - and how it mitigates shocks

Japan relies on the Middle East for around 95% of its oil supplies and 11% of its liquefied natural gas imports with around 70% and 6% respectively coming via the Strait of Hormuz, which is effectively closed due to the Iran war.

Here are details on Japan's dependence on the Middle East for energy supplies and what measures it can take to reduce import risks.

OIL

Japan sources around 95% of its oil imports from the Middle East.

In January, Japan imported 2.8 million barrels of oil per day overall, of which 1.6 million bpd came from Saudi Arabia with supplies also from the United Arab Emirates, Kuwait and Qatar.

Japan holds emergency oil reserves equivalent to 254 days of consumption, split between national stockpiles (146 days), private-sector stockpiles (101 days) and joint stockpiles with oil-producing countries (7 days).

Among those, Saudi Aramco uses 13 crude oil stockpiling tanks in Okinawa, enabling Saudi Arabia's state oil producer to store about 1.3 million kilolitres of crude oil, or some 8.2 million barrels - equal to about three days of Japan's consumption.

The tank lease deal has been running since 2010 and has been renewed every three years. In return for providing free storage space to Aramco, Japan gets preferential access to the stock in the event of an emergency.

Japan has no current plans to release oil stockpiles, officials said this week.

The last time Japan released some of its stockpile was in 2022 following Russia's invasion of Ukraine, which it did in coordination with the International Energy Agency and other countries.

Japan's government has subsidies in effect to cushion the population from rising fossil fuel prices, as the country is especially vulnerable to rising import costs amid a weak yen.

LNG

Japan's LNG imports from the Middle East - specifically Qatar, Oman and the United Arab Emirates - make up 11% of its total. Japan's main LNG supplier is Australia, accounting for about 40% of overall imports for the world's No.2 LNG buyer.

As of March 1, major Japanese utilities increased their LNG stockpiles by 10% to 2.19 million metric tons, which equals around 12 days of consumption, from a week before.

Overall, Japan holds over 4 million tons of LNG in storage, according to Kpler. Only 0.1 million tons per week of Japan's LNG supply comes via the Strait of Hormuz.

In the event of prolonged Strait of Hormuz disruption, Japan's LNG stockpile would cover 44 weeks of consumption, according to Kpler. If all of Japan's LNG imports were halted, the country would have about three weeks of supply.

Japan trades around 40 million tons of LNG annually and could redirect some of that back home in case of emergency. It has an emergency supply agreement with Qatar and is looking into similar arrangements, including cargo swaps, with Italy and South Korea.

JERA, Japan's biggest LNG buyer, acts as the government's agent to ensure at least one LNG cargo - about 70,000 tons - is secured each month to mitigate supply risks.

-Reporting by Katya Golubkova; Editing by Toby Chopra/Reuters